[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1177 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
108th CONGRESS
  1st Session
                                S. 1177

_______________________________________________________________________

                                 AN ACT


 
 To prevent tobacco smuggling, to ensure the collection of all tobacco 
                     taxes, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Prevent All Cigarette Trafficking 
Act'' or ``PACT Act''.

SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO TAXES.

    (a) Definitions.--Section 1 of the Act of October 19, 1949 (15 
U.S.C. 375; commonly referred to as the ``Jenkins Act''), is amended--
            (1) by striking paragraphs (1), (2), and (3) and inserting 
        the following new paragraphs:
            ``(1) The term `attorney general', with respect to a State, 
        means the attorney general or other chief law enforcement 
        officer of the State, or the designee of that officer.
            ``(2) The term `cigarette' means--
                    ``(A) any roll of tobacco wrapped in paper or in 
                any substance not containing tobacco which is to be 
                heated or burned;
                    ``(B) any roll of tobacco wrapped in any substance 
                containing tobacco that, because of its appearance, the 
                type of tobacco used in the filler, or its packaging or 
                labeling, is likely to be offered to, or purchased by, 
                consumers as a cigarette described in subparagraph (A);
                    ``(C) any roll of tobacco wrapped in any substance 
                that because of its appearance, the type of tobacco 
                used in the filler, or its packaging or labeling, is 
                likely to be offered to, or purchased by, consumers as 
                a cigarette; or
                    ``(D) loose rolling tobacco that, because of its 
                appearance, type, packaging, or labeling, is likely to 
                be offered to, or purchased by, consumers as tobacco 
                for making cigarettes.
            ``(3) The term `smokeless tobacco' means any finely cut, 
        ground, powdered, or leaf tobacco that is intended to be placed 
        in the oral or nasal cavity or otherwise consumed without being 
        combusted.'';
            (2) in paragraph (5)--
                    (A) by inserting ``, local, or Tribal'' after ``the 
                State'';
                    (B) by striking ``administer the cigarette tax 
                law'' and inserting ``collect the tobacco tax or 
                administer the tax law''; and
                    (C) by inserting ``, locality, or Tribe, 
                respectively'' after ``a State''.
            (3) by striking paragraph (6) and inserting the following 
        new paragraph (6):
            ``(6) The term `delivery sale' means any sale of cigarettes 
        or smokeless tobacco in interstate commerce to a consumer if--
                    ``(A) the consumer submits the order for such sale 
                by means of a telephone or other method of voice 
                transmission, the mails, or the Internet or other 
                online service, or the seller is otherwise not in the 
                physical presence of the buyer when the request for 
                purchase or order is made; or
                    ``(B) the cigarettes or smokeless tobacco are 
                delivered by use of a common carrier, private delivery 
                service, or the mails, or the seller is not in the 
                physical presence of the buyer when the buyer obtains 
                personal possession of the delivered cigarettes or 
                smokeless tobacco.''; and
            (4) by adding at the end the following new paragraphs:
            ``(8) The term `delivery seller' means a person who makes a 
        delivery sale.
            ``(9) The term `common carrier' means any person (other 
        than a local messenger service or the United States Postal 
        Service (as defined in section 102 of title 39, United States 
        Code)) that holds itself out to the general public as a 
        provider for hire of the transportation by water, land, or air 
        of merchandise, whether or not the person actually operates the 
        vessel, vehicle, or aircraft by which the transportation is 
        provided, between a port or place and a port or place in the 
        United States.
            ``(10) The term `interstate commerce' means commerce 
        between a State and any place outside the State, commerce 
        between a State and any Indian lands in the State, or commerce 
        between points in the same State but though any place outside 
        the State or through any Indian lands.
            ``(11) The term `person' means an individual, corporation, 
        company, association, firm, partnership, society, State 
        government, local government, Indian tribal government, 
        governmental organization of such government, or joint stock 
        company.
            ``(12) The term `State' means a State of the United States, 
        the District of Columbia, the Commonwealth of Puerto Rico, or 
        any territory or possession of the United States.
            ``(13) The term `Indian Country' has the meaning given that 
        term in section 1151 of title 18, United States Code, except 
        that within the State of Alaska that term applies only to the 
        Metlakatla Indian Community, Annette Island Reserve.
            ``(14) The term `Indian Tribe', `Tribe', or `Tribal' refers 
        to an Indian tribe as defined in the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450b(e)) or as listed 
        pursuant to section 104 of the Federally Recognized Indian 
        Tribe List Act of 1994 (Public Law 103-454; 25 U.S.C. 479a-1).
            ``(15) The term `tobacco tax administrator', in the case of 
        a State, local, or Tribal government, means the official of the 
        government duly authorized to collect the tobacco tax or 
        administer the tax law of the government.''.
    (b) Reports to State Tobacco Tax Administrators.--Section 2 of that 
Act (15 U.S.C. 376) is amended--
            (1) by striking ``cigarettes'' each place it appears and 
        inserting ``cigarettes or smokeless tobacco'';
            (2) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``or transfers'' and 
                        inserting ``, transfers, or ships'';
                            (ii) by inserting ``, locality, or Indian 
                        Country of an Indian Tribe'' after ``a State''; 
                        and
                            (iii) by striking ``to other than a 
                        distributor licensed by or located in such 
                        State,'';
                    (B) in paragraph (1)--
                            (i) by striking ``administrator of the 
                        State'' and inserting ``administrators of the 
                        State and place''; and
                            (ii) by striking ``; and'' and inserting 
                        the following: ``, as well as telephone numbers 
                        for each place of business, a principal 
                        electronic mail address, any website addresses, 
                        and the name, address, and telephone number of 
                        an agent in the State authorized to accept 
                        service on behalf of such person;'';
                    (C) in paragraph (2), by striking ``and the 
                quantity thereof.'' and inserting ``the quantity 
                thereof, and the name, address, and phone number of the 
                person delivering the shipment to the recipient on 
                behalf of the delivery seller, with all invoice or 
                memoranda information relating to specific customers to 
                be organized by city or town and by zip code; and''; 
                and
                    (D) by adding at the end the following new 
                paragraph:
            ``(3) with respect to each memorandum or invoice filed with 
        a State under paragraph (2), also file copies of such 
        memorandum or invoice with the tobacco tax administrators and 
        chief law enforcement officers of the local governments and 
        Indian Tribes operating within the borders of the State that 
        apply their own local or Tribal taxes on cigarettes or 
        smokeless tobacco.''; and
            (3) in subsection (b)--
                    (A) by striking ``(1)''; and
                    (B) by striking ``, and (2)'' and all that follows 
                and inserting a period.
    (c) Requirements for Delivery Sales.--That Act is further amended 
by inserting after section 2 the following new section:
    ``Sec. 2A. (a) With respect to delivery sales into a specific State 
and place, each delivery seller shall comply with--
            ``(1) the shipping requirements set forth in subsection 
        (b);
            ``(2) the recordkeeping requirements set forth in 
        subsection (c);
            ``(3) all State, local, Tribal, and other laws generally 
        applicable to sales of cigarettes or smokeless tobacco as if 
        such delivery sales occurred entirely within the specific State 
        and place, including laws imposing--
                    ``(A) excise taxes;
                    ``(B) licensing and tax-stamping requirements; and
                    ``(C) other payment obligations or legal 
                requirements relating to the sale, distribution, or 
                delivery of cigarettes or smokeless tobacco; and
            ``(4) the tax collection requirements set forth in 
        subsection (d).
    ``(b)(1) Each delivery seller shall include on the bill of lading 
included with the shipping package containing cigarettes or smokeless 
tobacco sold pursuant to such order a clear and conspicuous statement 
providing as follows: `CIGARETTES/SMOKELESS TOBACCO: FEDERAL LAW 
REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND COMPLIANCE 
WITH APPLICABLE LICENSING AND TAX-STAMPING OBLIGATIONS'.
    ``(2) Any shipping package described in paragraph (1) that is not 
labeled in accordance with that paragraph shall be treated as non-
deliverable matter by a common carrier or the United States Postal 
Service if the common carrier or the United States Postal Service, as 
the case may be, knows or should know the contents of the package.
    ``(c)(1) Each delivery seller shall keep a record of all delivery 
sales so made, including all of the information described in section 
2(a)(2), organized by the State, and within such State, by the city or 
town and by zip code, into which such delivery sales are so made.
    ``(2) Records of delivery sales shall be kept under paragraph (1) 
in the year in which made and for the next four years.
    ``(3) Records kept under paragraph (1) shall be made available to 
tobacco tax administrators of the States, to local governments and 
Indian Tribes that apply their own local or Tribal taxes on cigarettes 
or smokeless tobacco, to the attorneys general of the States, to the 
chief law enforcement officers of such local governments and Indian 
Tribes, and to the Attorney General of the United States in order to 
ensure the compliance of persons making delivery sales with the 
requirements of this Act.
    ``(d)(1) Except as provided in paragraph (2), no cigarettes or 
smokeless tobacco may be delivered pursuant to a delivery sale in 
interstate commerce unless in advance of the delivery--
            ``(A) any cigarette or smokeless tobacco excise tax that is 
        imposed by the State in which the cigarettes or smokeless 
        tobacco are to be delivered has been paid to the State;
            ``(B) any cigarette or smokeless tobacco excise tax that is 
        imposed by the local government of the place in which the 
        cigarette or smokeless tobacco are to be delivered has been 
        paid to the local government; and
            ``(C) any required stamps or other indicia that such excise 
        tax has been paid are properly affixed or applied to the 
        cigarettes or smokeless tobacco.
    ``(2) Paragraph (1) does not apply to a delivery sale of smokeless 
tobacco if the law of the State or local government of the place where 
the smokeless tobacco is to be delivered requires or otherwise provides 
that delivery sellers collect the excise tax from the consumer and 
remit the excise tax to the State or local government, and the delivery 
seller complies with the requirement.
    ``(e)(1) Each State, and each local government or Indian Tribal 
government that levies a tax subject to subsection (a)(3), may compile 
a list of delivery sellers who are in compliance with this Act with 
respect to such State, locality, or Indian Tribe. If a State, local 
government, or Indian Tribe posts a list pursuant to this subsection 
that specifically refers to this subsection, no common carrier or other 
person may knowingly deliver cigarettes or smokeless tobacco to 
consumers in such State or locality or in the Indian Country of such 
Indian Tribe unless the delivery seller is on the list at the time of 
delivery.
    ``(2)(A) Each State, and each local government or Indian Tribal 
government that levies a tax subject to subsection (a)(3), may compile 
a list of delivery sellers who are not in compliance with this Act with 
respect to such State, locality, or Indian Tribe.
    ``(B) A State, locality, or Indian Tribal government may provide 
such a list to a common carrier, the United States Postal Service, or 
other person. Such a list shall be confidential, and a common carrier, 
the United States Postal Service, or other person that receives such a 
list shall maintain the confidentiality of such list.
    ``(C) If a State, local government, or Indian Tribal government 
provides such a list pursuant to this subsection that specifically 
refers to this subsection, no common carrier, the United States Postal 
Service, or other person may knowingly deliver any item to a consumer 
in such State or locality or in the Indian Country of such Indian Tribe 
for a delivery seller on such list unless the common carrier, the 
United States Postal Service, or person in good faith determines that 
the item does not include cigarettes or smokeless tobacco.
    ``(f) For purposes of this Act, a delivery sale shall be deemed to 
have occurred in the State and place where the buyer obtains personal 
possession of the cigarettes or smokeless tobacco, and a delivery 
pursuant to a delivery sale is deemed to have been initiated or ordered 
by the delivery seller.''.
    (d) Penalties.--Section 3 of that Act (15 U.S.C. 377) is amended--
            (1) by inserting ``(a)'' before ``Whoever'';
            (2) in subsection (a), as so designated--
                    (A) by inserting ``(except for a State, local, or 
                Tribal government)'' after ``this Act''; and
                    (B) by striking ``shall be guilty of a misdemeanor 
                and shall be fined not more than $1,000, or imprisoned 
                not more than 6 months'' and inserting ``shall be 
                guilty of a felony, fined under subchapter C of chapter 
                227 of title 18, United States Code, imprisoned not 
                more than three years, or both''; and
            (3) by adding at the end the following new subsection:
    ``(b)(1) Whoever violates any provision of this Act shall be 
subject to a civil penalty in an amount not to exceed the greater of--
            ``(A) $5,000 in the case of the first violation, or $10,000 
        for any other violation; or
            ``(B) for any violation, 2 percent of the gross sales of 
        cigarettes or smokeless tobacco of such person during the one-
        year period ending on the date of the violation.
    ``(2) A civil penalty under paragraph (1) for a violation of this 
Act is in addition to any criminal penalty under subsection (a) for the 
violation.''.
    (e) Enforcement.--Section 4 of that Act (15 U.S.C. 378) is 
amended--
            (1) by inserting ``(a)'' before ``The United States 
        district courts'';
            (2) in subsection (a), as so designated, by inserting 
        before the period the following: ``, and to provide other 
        appropriate injunctive or equitable relief, including money 
        damages, for such violations''; and
            (3) by adding at the end the following new subsections:
    ``(b) The Attorney General of the United States shall administer 
and enforce the provisions of this Act.
    ``(c)(1)(A) A State, through its attorney general (or a designee 
thereof), or a local government or Indian Tribe that levies a tax 
subject to section 2A(a)(3), through its chief law enforcement officer 
(or a designee thereof), may bring an action in the United States 
district courts to prevent and restrain violations of this Act by any 
person (or by any person controlling such person) or to obtain any 
other appropriate relief from any person (or from any person 
controlling such person) for violations of this Act, including civil 
penalties, money damages, and injunctive or other equitable relief.
    ``(B) Nothing in this Act shall be deemed to abrogate or constitute 
a waiver of any sovereign immunity of a State or local government or 
Indian Tribe against any unconsented lawsuit under this Act, or 
otherwise to restrict, expand, or modify any sovereign immunity of a 
State or local government or Indian Tribe.
    ``(2) A State, through its attorney general, or a local government 
or Indian Tribe that levies a tax subject to section 2A(a)(3), through 
its chief law enforcement officer (or a designee thereof), may provide 
evidence of a violation of this Act by any person not subject to State, 
local, or Tribal government enforcement actions for violations of this 
Act to the Attorney General of the United States or a United State 
Attorney, who shall take appropriate actions to enforce the provisions 
of this Act.
    ``(3)(A) Notwithstanding any other provision of law and subject to 
subparagraph (B), an amount equal to 50 percent of any criminal and 
civil penalties collected by the United States Government in enforcing 
the provisions of this Act shall be available to the Department of 
Justice for purposes of enforcing the provisions of this Act and other 
laws relating to contraband tobacco products.
    ``(B) Of the amount available to the Department under subparagraph 
(A), not less than 50 percent shall be made available only to the 
agencies and offices within the Department that were responsible for 
the enforcement actions in which the penalties concerned were imposed.
    ``(4) The remedies available under this subsection are in addition 
to any other remedies available under Federal, State, local, Tribal, or 
other law.
    ``(5) Nothing in this Act shall be construed to expand, restrict, 
or otherwise modify any right of an authorized State official to 
proceed in State court, or take other enforcement actions, on the basis 
of an alleged violation of State or other law.
    ``(6) Nothing in this Act shall be construed to expand, restrict, 
or otherwise modify any right of an authorized Indian Tribal government 
official to proceed in Tribal court, or take other enforcement actions, 
on the basis of an alleged violation of Tribal law.
    ``(7) Nothing in this Act shall be construed to expand, restrict, 
or otherwise modify any right of an authorized local government 
official to proceed in State court, or take other enforcement actions, 
on the basis of an alleged violation of local or other law.
    ``(d) Any person who holds a permit under section 5712 of the 
Internal Revenue Code of 1986 may bring an action in the United States 
district courts to prevent and restrain violations of this Act by any 
person (or by any person controlling such person) other than a State, 
local, or Tribal government.
    ``(e)(1) Any person who commences a civil action under subsection 
(d) shall inform the Attorney General of the United States of the 
action.
    ``(2) It is the sense of Congress that any attorney general of a 
State, or chief law enforcement officer of a locality or Tribe, who 
commences a civil action under this section should inform the Attorney 
General of the United States of the action.
    ``(f)(1) The Attorney General of the United States shall make 
available to the public, by posting such information on the Internet 
and by other means, information about all enforcement actions 
undertaken by the Attorney General or United States Attorneys, or 
reported to the Attorney General, under this section, including 
information on the resolution of such actions and, in particular, 
information on how the Attorney General and the United States Attorney 
have responded to referrals of evidence of violations pursuant to 
subsection (b)(2).
    ``(2) The Attorney General shall submit to Congress each year a 
report containing the information described in paragraph (1).''.

SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS NONMAILABLE 
              MATTER.

    Section 1716 of title 18, United States Code, is amended--
            (1) by redesignating subsections (j) and (k) as subsections 
        (k) and (l), respectively; and
            (2) by inserting after subsection (i) the following new 
        subsection (j):
    ``(j)(1) Except as provided in paragraph (2), the transmission in 
the mails of any tobacco product, including cigarettes (as that term is 
defined in section 1(2) of the Act of October 19, 1949 (15 U.S.C. 375; 
commonly referred to as the `Jenkins Act')) and smokeless tobacco (as 
that term is defined in section 1(3) of that Act), is prohibited, and 
tobacco products are nonmailable and shall not be deposited in or 
carried through the mails.
    ``(2) Paragraph (1) shall apply only to States that are contiguous 
with at least one other State of the United States.''.

SEC. 4. PENAL PROVISIONS REGARDING TRAFFICKING IN CONTRABAND CIGARETTES 
              OR SMOKELESS TOBACCO.

    (a) Threshold Quantity for Treatment as Contraband Cigarettes.--(1) 
Section 2341(2) of title 18, United States Code, is amended by striking 
``60,000 cigarettes'' and inserting ``10,000 cigarettes''.
    (2) Section 2342(b) of that title is amended by striking ``60,000'' 
and inserting ``10,000''.
    (3) Section 2343 of that title is amended--
            (A) in subsection (a), by striking ``60,000'' and inserting 
        ``10,000''; and
            (B) in subsection (b), by striking ``60,000'' and inserting 
        ``10,000''.
    (b) Contraband Smokeless Tobacco.--(1) Section 2341 of that title 
is amended--
            (A) in paragraph (4), by striking ``and'' at the end;
            (B) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (C) by adding at the end the following new paragraphs:
            ``(6) the term `smokeless tobacco' means any finely cut, 
        ground, powdered, or leaf tobacco that is intended to be placed 
        in the oral or nasal cavity or otherwise consumed without being 
        combusted;
            ``(7) the term `contraband smokeless tobacco' means a 
        quantity in excess of 500 single-unit consumer-sized cans or 
        packages of smokeless tobacco, or their equivalent, that are in 
        the possession of any person other than--
                    ``(A) a person holding a permit issued pursuant to 
                chapter 52 of the Internal Revenue Code of 1986 as 
                manufacturer of tobacco products or as an export 
                warehouse proprietor, a person operating a customs 
                bonded warehouse pursuant to section 311 or 555 of the 
                Tariff Act of 1930 (19 U.S.C. 1311, 1555), or an agent 
                of such person;
                    ``(B) a common carrier transporting such smokeless 
                tobacco under a proper bill of lading or freight bill 
                which states the quantity, source, and designation of 
                such smokeless tobacco;
                    ``(C) a person who--
                            ``(i) is licensed or otherwise authorized 
                        by the State where such smokeless tobacco is 
                        found to engage in the business of selling or 
                        distributing tobacco products or, for smokeless 
                        tobacco found in Indian Country, is licensed or 
                        otherwise authorized by the Tribal government 
                        of such Indian Country to account for and pay 
                        smokeless tobacco taxes imposed by the Tribal 
                        government; and
                            ``(ii) has complied with the accounting, 
                        tax, and payment requirements relating to such 
                        license or authorization with respect to such 
                        smokeless tobacco; or
                    ``(D) an officer, employee, or agent of the United 
                States or a State or a Tribe, or any department, 
                agency, or instrumentality of the United States, a 
                State (including any political subdivision of a State), 
                or a Tribe (including any political subdivision of a 
                Tribe), having possession of such smokeless tobacco in 
                connection with the performance of official duties;''.
    (2) Section 2342(a) of that title is amended by inserting ``or 
contraband smokeless tobacco'' after ``contraband cigarettes''.
    (3) Section 2343(a) of that title is amended by inserting ``, or 
any quantity of smokeless tobacco in excess of 500 single-unit 
consumer-sized cans or packages,'' before ``in a single transaction''.
    (4) Section 2344(c) of that title is amended by inserting ``or 
contraband smokeless tobacco'' after ``contraband cigarettes''.
    (5) Section 2345 of that title is amended by inserting ``or 
smokeless tobacco'' after ``cigarettes'' each place it appears.
    (c) Additional Definitional Matters.--Section 2341 of such title is 
further amended--
            (1) in paragraph (2), as amended by subsection (a)(1) of 
        this section--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``State cigarette taxes in the State where 
                such cigarettes are found, if the State'' and inserting 
                ``State, local, or Tribal cigarette taxes in the State, 
                locality, or Indian Country where such cigarettes are 
                found, if the State, local or Tribal government'';
                    (B) in subparagraph (C)(i), by inserting before the 
                semicolon the following: ``, or, for cigarettes found 
                in Indian County, is licensed or otherwise authorized 
                by the Tribal government of such Indian Country to 
                account for and pay cigarette taxes imposed by the 
                Tribal government''; and
                    (C) in subparagraph (D)--
                            (i) by inserting ``or a Tribe'' after ``a 
                        State'' the first place it appears; and
                            (ii) by striking ``or a State (or any 
                        political subdivision of a State)'' and 
                        inserting ``, a State (or any political 
                        subdivision of a State), or a Tribe (including 
                        any political subdivision of a Tribe)'';
            (2) in paragraph (3), by inserting before the semicolon the 
        following: ``, or, for a carrier making a delivery entirely 
        within Indian Country, under equivalent operating authority 
        from the Indian Tribal government of such Indian Country''; and
            (3) by adding at the end the following new paragraphs:
            ``(8) the term `Indian Country' has the meaning given that 
        term in section 1151 of title 18, United States Code, except 
        that within the State of Alaska that term applies only to the 
        Metlakatla Indian Community, Annette Island Reserve; and
            ``(9) the term `Indian Tribe', `Tribe', or `Tribal' refers 
        to an Indian tribe as defined in the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450b(e)) or as listed 
        pursuant to section 104 of the Federally Recognized Indian 
        Tribe List Act of 1994 (Public Law 103-454; 25 U.S.C. 479a-
        1).''.
    (d) Recordkeeping, Reporting, and Inspection.--Section 2343 of that 
title, as amended by this section, is further amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``only--'' and inserting ``such information as 
                the Attorney General considers appropriate for purposes 
                of enforcement of this chapter, including--''; and
                    (B) in the flush matter following paragraph (3), by 
                striking the second sentence;
            (2) by redesignating subsection (b) as subsection (c);
            (3) by inserting after subsection (a) the following new 
        subsection (b):
    ``(b) Any person who engages in a delivery sale, and who ships, 
sells, or distributes any quantity in excess of 10,000 cigarettes, or 
any quantity in excess of 500 single-unit consumer-sized cans or 
packages of smokeless tobacco, or their equivalent, within a single 
month, shall submit to the Attorney General, pursuant to rules or 
regulations prescribed by the Attorney General, a report that sets 
forth the following:
            ``(1) The person's beginning and ending inventory of 
        cigarettes and cans or packages of smokeless tobacco (in total) 
        for such month.
            ``(2) The total quantity of cigarettes and cans or packages 
        of smokeless tobacco that the person received within such month 
        from each other person (itemized by name and address).
            ``(3) The total quantity of cigarettes and cans or packages 
        of smokeless tobacco that the person distributed within such 
        month to each person (itemized by name and address) other than 
        a retail purchaser.''; and
            (4) by adding at the end the following new subsections:
    ``(d) Any report required to be submitted under this chapter to the 
Attorney General shall also be submitted to the Secretary of the 
Treasury and to the attorneys general and the tax administrators of the 
States from where the shipments, deliveries, or distributions both 
originated and concluded, and to the chief law enforcement officer and 
tax administrator of the Tribe for shipments, deliveries or 
distributions that originated or concluded on the Indian Country of the 
Indian Tribe.
    ``(e) In this section, the term `delivery sale' means any sale of 
cigarettes or smokeless tobacco in interstate commerce to a consumer 
if--
                    ``(A) the consumer submits the order for such sale 
                by means of a telephone or other method of voice 
                transmission, the mails, or the Internet or other 
                online service, or by any other means where the 
                consumer is not in the same physical location as the 
                seller when the purchase or offer of sale is made; or
                    ``(B) the cigarettes or smokeless tobacco are 
                delivered by use of the mails, common carrier, private 
                delivery service, or any other means where the consumer 
                is not in the same physical location as the seller when 
                the consumer obtains physical possession of the 
                cigarettes or smokeless tobacco.
    ``(f) In this section, the term `interstate commerce' means 
commerce between a State and any place outside the State, commerce 
between a State and any Indian lands in the State, or commerce between 
points in the same State but through any place outside the State or 
though any Indian lands.''.
    (e) Disposal or Use of Forfeited Cigarettes and Smokeless 
Tobacco.--Section 2344(c) of that title, as amended by this section, is 
further amended by striking ``seizure and forfeiture,'' and all that 
follows and inserting ``seizure and forfeiture, and any cigarettes or 
smokeless tobacco so seized and forfeited shall be either--
            ``(1) destroyed and not resold; or
            ``(2) used for undercover investigative operations for the 
        detection and prosecution of crimes, and then destroyed and not 
        resold.''.
    (f) Effect on State, Local, and Tribal Law.--Section 2345 of that 
title is amended--
            (1) in subsection (a), by striking ``a State to enact and 
        enforce'' and inserting ``a State, local government, or Tribe 
        to enact and enforce its own''; and
            (2) in subsection (b), by striking ``of States, through 
        interstate compact or otherwise, to provide for the 
        administration of State'' and inserting ``of State, local, or 
        Tribal governments, through interstate compact or otherwise, to 
        provide for the administration of State, local, or Tribal''.
    (g) Enforcement.--Section 2346 of that title is amended--
            (1) by inserting ``(a)'' before ``The Attorney General''; 
        and
            (2) by adding at the end the following new subsection:
    ``(b)(1) A State, through its attorney general, a local government 
or Indian Tribe, through its chief law enforcement officer (or a 
designee thereof), or any person who holds a permit under section 5712 
of the Internal Revenue Code of 1986, may bring an action in the United 
States district courts to prevent and restrain violations of this 
chapter by any person (or by any person controlling such person), 
except that any person who holds a permit under section 5712 of the 
Internal Revenue Code of 1986 may not bring such an action against a 
State, local, or Tribal government.
    ``(2) A State, through its attorney general, or a local government 
or Indian Tribe, through its chief law enforcement officer (or a 
designee thereof), may in a civil action under paragraph (1) also 
obtain any other appropriate relief for violations of this chapter from 
any person (or by any person controlling such person), including civil 
penalties, money damages, and injunctive or other equitable relief. 
Nothing in this chapter shall be deemed to abrogate or constitute a 
waiver of any sovereign immunity of a State or local government or 
Indian Tribe against any unconsented lawsuit under this chapter, or 
otherwise to restrict, expand, or modify any sovereign immunity of a 
State or local government or Indian Tribe.
    ``(3) The remedies under paragraphs (1) and (2) are an addition to 
any other remedies under Federal, State, local, Tribal, or other law.
    ``(4) Nothing in this chapter shall be construed to expand, 
restrict, or otherwise modify any right of an authorized State official 
to proceed in State court, or take other enforcement actions, on the 
basis of an alleged violation of State or other law.
    ``(5) Nothing in this chapter shall be construed to expand, 
restrict, or otherwise modify any right of an authorized Indian Tribal 
government official to proceed in Tribal court, or take other 
enforcement actions, on the basis of an alleged violation of Tribal 
law.
    ``(6) Nothing in this chapter shall be construed to expand, 
restrict, or otherwise modify any right of an authorized local 
government official to proceed in State court, or take other 
enforcement actions, on the basis of an alleged violation of local or 
other law.''.
    (h) Conforming and Clerical Amendments.--(1) The section heading 
for section 2343 of that title is amended to read as follows:
``Sec. 2343. Recordkeeping, reporting, and inspection''.
    (2) The section heading for section 2345 of such title is amended 
to read as follows:
``Sec. 2345. Effect on State, Tribal, and local law''.
    (3) The table of sections at the beginning of chapter 114 of that 
title is amended--
            (A) by striking the item relating to section 2343 and 
        inserting the following new item:

``2343. Recordkeeping, reporting, and inspection.'';
        and
            (B) by striking the item relating to section 2345 and 
        insert the following new item:

``2345. Effect on State, Tribal, and local law.''.
    (4)(A) The heading for chapter 114 of that title is amended to read 
as follows:

   ``CHAPTER 114--TRAFFICKING IN CONTRABAND CIGARETTES AND SMOKELESS 
                               TOBACCO''.

    (B) The table of chapters at the beginning of part I of that title 
is amended by striking the item relating to section 114 and inserting 
the following new item:

``114. Trafficking in contraband cigarettes and smokeless       2341''.
                            tobacco.

SEC. 5. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.

    (a) In General.--A Tobacco Product Manufacturer or importer may not 
sell in, deliver to, or place for delivery sale, or cause to be sold 
in, delivered to, or placed for delivery sale in, a State that is a 
party to the Master Settlement Agreement any cigarette manufactured by 
a Tobacco Product Manufacturer that is not in full compliance with the 
terms of the Model Statute or Qualifying Statute enacted by such State 
requiring funds to be placed into a qualified escrow account under 
specified conditions, or any regulations promulgated pursuant to such 
terms.
    (b) Jurisdiction to Prevent and Restrain Violations.--(1) The 
United States district courts shall have jurisdiction to prevent and 
restrain violations of subsection (a) in accordance with this 
subsection.
    (2) A State, through its attorney general, may bring an action in 
the United States district courts to prevent and restrain violations of 
subsection (a) by any person (or by any person controlling such 
person).
    (3) In any action under paragraph (2), a State, through its 
attorney general, shall be entitled to reasonable attorney fees from a 
person found to have willfully and knowingly violated subsection (a).
    (4) The remedy available under paragraph (2) is in addition to any 
other remedies available under Federal, State, or other law.
    (5) Nothing in this subsection shall be construed to prohibit an 
authorized State official from proceeding in State court or taking 
other enforcement actions on the basis of an alleged violation of State 
or other law.
    (6) The Attorney General may administer and enforce subsection (a).
    (c) Definitions.--In this section:
            (1) Master settlement agreement.-- The term ``Master 
        Settlement Agreement'' means the agreement executed November 
        23, 1998, by the Attorneys General of 46 States, the District 
        of Columbia, the Commonwealth of Puerto Rico, and four 
        Territories of the United States, on the one hand, and certain 
        tobacco manufacturers on the other hand.
            (2) Tobacco product manufacturer.--The term ``Tobacco 
        Product Manufacturer'' has the meaning given that term in 
        section II(uu) of the Master Settlement Agreement.
            (3) Importer.--The term ``importer'' means each of the 
        following:
                    (A) Any person in the United States to whom non-
                tax-paid tobacco products manufactured in a foreign 
                country, Puerto Rico, the Virgin Islands, or a 
                possession of the United States are shipped or 
                consigned.
                    (B) Any person who removes cigars or cigarettes for 
                sale or consumption in the United States from a customs 
                bonded manufacturing warehouse.
                    (C) Any person who smuggles or otherwise unlawfully 
                brings tobacco products into the United States.
            (4) Model statute; qualifying statute.--The terms ``Model 
        Statute'' and ``Qualifying Statute'' means a statute as defined 
        in section IX(d)(2)(e) of the Master Settlement Agreement.
            (5) Delivery sale.--The term ``delivery sale'' means any 
        sale of cigarettes or smokeless tobacco in interstate commerce 
        to a consumer if--
                    (A) the consumer submits the order for such sale by 
                means of a telephone or other method of voice 
                transmission, the mails, or the Internet or other 
                online service, or the seller is otherwise not in the 
                physical presence of the buyer when the request for 
                purchase or order is made; or
                    (B) the cigarettes or smokeless tobacco are 
                delivered by use of a common carrier, private delivery 
                service, or the mails, or the seller is not in the 
                physical presence of the buyer when the buyer obtains 
                personal possession of the delivered cigarettes or 
                smokeless tobacco.
            (6) Interstate commerce.--The term ``interstate commerce'' 
        means commerce between a State and any place outside the State, 
        commerce between a State and any Indian lands in the State, or 
        commerce between points in the same State but through any place 
        outside the State or through any Indian lands.

SEC. 6. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF ALCOHOL, 
              TOBACCO, FIREARMS, AND EXPLOSIVES.

    (a) In General.--(1) Commencing as of the date of the enactment of 
this Act and without fiscal year limitation, the authorities in section 
102(b) of the Department of Justice and Related Agencies Appropriations 
Act, 1993 (title I of Public Law 102-395; 106 Stat. 1838) shall be 
available to the Bureau of Alcohol, Tobacco, Firearms, and Explosives 
for undercover investigative operations of the Bureau which are 
necessary for the detection and prosecution of crimes against the 
United States.
    (2) For purposes of the exercise of the authorities referred to in 
paragraph (1) by the Bureau, a reference in such section 102(b) to the 
Federal Bureau of Investigation shall be deemed to be a reference to 
the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and a 
reference to the Director of the Federal Bureau of Investigation shall 
be deemed to be a reference to the Director of the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives.
    (b) Limitations in Appropriations Acts.--The exercise of the 
authorities referred to in subsection (a)(1) by the Bureau of Alcohol, 
Tobacco, Firearms, and Explosives shall be subject to the provisions of 
appropriations Acts.

SEC. 7. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS, AND 
              EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE AND SMOKELESS 
              TOBACCO SELLERS.

    (a) In General.--Any officer of the Bureau of Alcohol, Tobacco, 
Firearms, and Explosives may, during normal business hours, enter the 
premises of any person described in subsection (b) for the purposes of 
inspecting--
            (1) any records or information required to be maintained by 
        such person under the provisions of law referred to in 
        subsection (d); or
            (2) any cigarettes or smokeless tobacco kept or stored by 
        such person at such premises.
    (b) Covered Persons.--A person described in this subsection is any 
person who engages in a delivery sale, and who ships, sells, 
distributes, or receives any quantity in excess of 10,000 cigarettes, 
or any quantity in excess of 500 single-unit consumer-sized cans or 
packages of smokeless tobacco, within a single month.
    (c) Relief.--(1) The district courts of the United States shall 
have the authority in a civil action under this subsection to compel 
inspections authorized by subsection (a).
    (2) Whoever violates subsection (a) or an order issued pursuant to 
paragraph (1) shall be subject to a civil penalty in an amount not to 
exceed $10,000 for each violation.
    (d) Covered Provisions of Law.--The provisions of law referred to 
in this subsection are as follows:
            (1) The Act of October 19, 1949 (15 U.S.C. 375; commonly 
        referred to as the ``Jenkins Act'').
            (2) Chapter 114 of title 18, United States Code.
            (3) This Act.
    (e) Delivery Sale Defined.--In this section, the term ``delivery 
sale'' has the meaning given that term in 2343(e)(1) of title 18, 
United States Code, as amended by section 4(b)(3) of this Act.

SEC. 8. COMPLIANCE WITH TARIFF ACT OF 1930.

    (a) Inapplicability of Exemptions from Requirements for Entry of 
Certain Cigarettes.--Subsection (b)(1) of section 802 of the Tariff Act 
of 1930 (19 U.S.C. 1681a) is amended by adding at the end the following 
new sentence: ``The preceding sentence shall not apply to any 
cigarettes sold in connection with a delivery sale (as that term is 
defined in section 1 of the Act of October 19, 1949 (15 U.S.C. 375; 
commonly referred to as the `Jenkins Act')).''.
    (b) State and Tribal Access to Customs Certifications.--Section 802 
of that Act is further amended by adding at the end the following new 
subsection:
    ``(d) State and Tribal Access to Customs Certifications.--A State, 
through its attorney general, and an Indian tribe (as that term is 
defined in the Indian Self-Determination and Education Assistance Act 
(25 U.S.C. 450b(e)) through its chief law enforcement officer, shall be 
entitled to obtain copies of any certification required pursuant to 
subsection (c) directly--
            ``(1) upon request to the agency of the United States 
        responsible for collecting such certification; or
            ``(2) upon request to the importer, manufacturer, or 
        authorized official of such importer or manufacturer.''.
    (c) Enforcement Provisions.--Section 803 of such Act (19 U.S.C. 
1681b) is amended--
            (1) in subsection (b)--
                    (A) in the first sentence--
                            (i) by inserting ``any of'' before ``the 
                        United States'' the first and second places it 
                        appears; and
                            (ii) by inserting before the period the 
                        following: ``, to any State in which such 
                        tobacco product, cigarette papers, or tube was 
                        imported, or to the Indian Tribe of any Indian 
                        Country (as that term is defined in section 
                        1151 of title 18, United States Code) in which 
                        such tobacco product, cigarette papers, or tube 
                        was imported''; and
                    (B) in the second sentence, by inserting ``, or to 
                any State or Indian Tribe,'' after ``the United 
                States''; and
            (2) by adding at the end the following new subsection:
    ``(c) Actions by States and Others.--
            ``(1) In general.--Any person who holds a permit under 
        section 5712 of the Internal Revenue Code of 1986 may bring an 
        action in the United States district courts to prevent and 
        restrain violations of this title by any person (or by any 
        person controlling such person), other than by a State, local, 
        or Tribal government.
            ``(2) Relief for state, local, and tribal governments.--A 
        State, through its attorney general, or a local government or 
        Tribe through its chief law enforcement officer (or a designee 
        thereof), may in a civil action under this title to prevent and 
        restrain violations of this title by any person (or by any 
        person controlling such person) or to obtain any other 
        appropriate relief for violations of this title by any person 
        (or from any person controlling such person), including civil 
        penalties, money damages, and injunctive or other equitable 
        relief.
            ``(3) Construction generally.--
                    ``(A) In general.--Nothing in this subsection shall 
                be deemed to abrogate or constitute a waiver of any 
                sovereign immunity of a State or local government or 
                Indian Tribe against any unconsented lawsuit under this 
                title or to otherwise restrict, expand, of modify any 
                sovereign immunity of a State local government or 
                Indian Tribe.
                    ``(B) Construction with other relief.--The remedies 
                available under this subsection are in addition to any 
                other remedies available under Federal, State, local, 
                Tribal, or other law.
            ``(4) Construction with forfeiture provisions.--Nothing in 
        this subsection shall be construed to require a State or Indian 
        Tribe to first bring an action pursuant to paragraph (1) when 
        pursuing relief under subsection (b).
    ``(d) Construction with Other Authorities.--
            ``(1) State authorities.--Nothing in this title shall be 
        construed to expand, restrict, or otherwise modify the right of 
        an authorized State official from proceeding in State court, or 
        taking other enforcement actions, on the basis of alleged 
        violation of State or other law.
            ``(2) Tribal authorities.--Nothing in this title shall be 
        construed to expand, restrict, or otherwise modify the right of 
        an authorized Indian Tribal government official from proceeding 
        in Tribal court, or taking other enforcement actions, on the 
        basis of alleged violation of Tribal law.
    (d) Inclusion of Smokeless Tobacco.--(1) Sections 802 and 803(a) of 
such Act are further amended by inserting ``or smokeless tobacco 
products'' after ``cigarettes'' each place it appears.
    (2) Section 802 of such Act is further amended--
            (A) in subsection (a)--
                    (i) in paragraph (1), by inserting ``or section 4 
                of the Comprehensive Smokeless Tobacco Health Education 
                Act of 1986 (15 U.S.C. 4403), respectively'' after 
                ``section 7 of the Federal Cigarette Labeling and 
                Advertising Act (15 U.S.C. 1335a)'';
                    (ii) in paragraph (2), by inserting ``or section 3 
                of the Comprehensive Smokeless Tobacco Health Education 
                Act of 1986 (15 U.S.C. 4402), respectively,'' after 
                ``section 4 of the Federal Cigarette Labeling and 
                Advertising Act (15 U.S.C. 1333)''; and
                    (iii) in paragraph (3), by inserting ``or section 
                3(c) of the Comprehensive Smokeless Tobacco Health 
                Education Act of 1986 (15 U.S.C. 4402(c)), 
                respectively,'' after ``section 4(c) of the Federal 
                Cigarette Labeling and Advertising Act (15 U.S.C. 
                1333(c))'';
            (B) in subsection (b)--
                    (i) in the paragraph caption of paragraph (1), by 
                inserting ``or smokeless tobacco'' after 
                ``cigarettes''; and
                    (ii) in the paragraph caption of paragraphs (2) and 
                (3), by inserting ``or smokeless tobacco'' after 
                ``Cigarettes''; and
            (C) in subsection (c)--
                    (i) in the subsection caption, by inserting ``or 
                Smokeless Tobacco'' after ``Cigarette'';
                    (ii) in paragraph (1), by inserting ``or section 4 
                of the Comprehensive Smokeless Tobacco Health Education 
                Act of 1986 (15 U.S.C. 4403), respectively'' after 
                ``section 7 of the Federal Cigarette Labeling and 
                Advertising Act (15 U.S.C. 1335a)'';
                    (iii) in paragraph (2)(A), ``or section 3 of the 
                Comprehensive Smokeless Tobacco Health Education Act of 
                1986 (15 U.S.C. 4402), respectively,'' after ``section 
                4 of the Federal Cigarette Labeling and Advertising Act 
                (15 U.S.C. 1333)''; and
                    (iv) in paragraph (2)(B), by inserting ``or section 
                3(c) of the Comprehensive Smokeless Tobacco Health 
                Education Act of 1986 (15 U.S.C. 4402(c)), 
                respectively'' after ``section 4(c) of the Federal 
                Cigarette Labeling and Advertising Act (15 U.S.C. 
                1333(c))''.
    (3) Section 803(c) of such Act, as amended by subsection (b)(1) of 
this section, is further amended by inserting ``, or any smokeless 
tobacco product,'' after ``or tube'' the first place it appears.
    (4)(A) The heading of title VIII of such Act is amended by 
inserting ``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.
    (B) The heading of section 802 of such Act is amended by inserting 
``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.

SEC. 9. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL MATTERS.

    (a) In General.--Nothing in this Act or the amendments made by this 
Act is intended nor shall be construed to affect, amend, or modify--
            (1) any agreements, compacts, or other intergovernmental 
        arrangements between any State or local government and any 
        government of an Indian tribe (as that term is defined in the 
        Indian Self-Determination and Education Assistance Act (25 
        U.S.C. 450b(e)) relating to the collection of taxes on 
        cigarettes or smokeless tobacco sold in Indian Country (as that 
        term is defined section 1151 of title 18, United States Code);
            (2) any State laws that authorize or otherwise pertain to 
        any such intergovernmental arrangements or create special rules 
        or procedures for the collection of State, local, or tribal 
        taxes on cigarettes or smokeless tobacco sold in Indian 
        Country;
            (3) any limitations under existing Federal law, including 
        Federal common law and treaties, on State, local, and tribal 
        tax and regulatory authority with respect to the sale, use, or 
        distribution of cigarettes and smokeless tobacco by or to 
        Indian Tribes or tribal members or in Indian Country;
            (4) any existing Federal law, including Federal common law 
        and treaties, regarding State jurisdiction, or lack thereof, 
        over any Tribe, tribal members or tribal reservations; and
            (5) any existing State or local government authority to 
        bring enforcement actions against persons located in Indian 
        Country.
    (b) Coordination of Law Enforcement.--Nothing in this Act or the 
amendments made by this Act shall be construed to inhibit or otherwise 
affect any coordinated law enforcement effort by 1 or more States or 
other jurisdictions, including Indian Tribes, through interstate 
compact or otherwise, that--
            (1) provides for the administration of tobacco product laws 
        or laws pertaining to interstate sales or other sales of 
        tobacco products;
            (2) provides for the seizure of tobacco products or other 
        property related to a violation of such laws; or
            (3) establishes cooperative programs for the administration 
        of such laws.
    (c) Treatment of State and Local Governments.--Notwithstanding any 
other provision of this Act, the provisions of this Act are not 
intended and shall not be construed to authorize, deputize, or 
commission States or local governments as instrumentalities of the 
United States.
    (d) Enforcement within Indian Country.--Nothing in this Act or the 
amendments made by this Act is intended to prohibit, limit, or restrict 
enforcement by the Attorney General of the United States of the 
provisions herein within Indian Country.
    (e) Ambiguity.--Any ambiguity between the language of this section 
or its application, and any other provision of this Act shall be 
resolved in favor of this section.

SEC. 10. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this Act 
shall take effect 90 days after the date of the enactment of this Act.
    (b) BATFE Authority.--
            (1) In general.--Sections 6 and 7 shall take effect on the 
        date of the enactment of this Act.
            (2) Definition.--For purposes of section 7, the definition 
        of delivery sale in section 2343(e)(1) of title 18, United 
        States Code, as amended by section 4(b)(3) of this Act, shall 
        take effect on the date of the enactment of this Act.

            Passed the Senate December 9, 2003.

            Attest:

                                                             Secretary.
108th CONGRESS

  1st Session

                                S. 1177

_______________________________________________________________________

                                 AN ACT

 To prevent tobacco smuggling, to ensure the collection of all tobacco 
                     taxes, and for other purposes.